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(Source: Lloyd Heinze, Texas Tech University)

The oil and gas industry is known for its boom-bust cycles, and it’s not just in prices or profits. As a surge in domestic drilling drives demand for engineers, some academics are urging caution as universities ramp up their petroleum engineering programs.

The shale drilling boom is often touted as a panacea for high unemployment, an economic engine that will create millions of jobs. Those who lived through past booms, though, worry that the wave of hiring could end badly for professionals if universities continue to open their doors to anyone who wants to catch that wave.

Petroleum engineering enrollment is growing at a rate that hasn’t been seen since the early 1980s, and the trend can’t continue, said Daniel Hill and Stephen Holditch, the current and former head of the petroleum engineering department at Texas A&M University, writing in the latest issue of the Journal of Petroleum Technology.

The number of incoming freshmen in petroleum engineering surged 55 percent, to 2,153 from 1,388 between the fall of 2011 and the fall of 2012, Hill and Holditch found, using data compiled by Lloyd Heinze, a professor at Texas Tech University.

Schools that allow enrollment to swell unabated are likely to be churning out graduates who can't find jobs when the current boom levels off. Ultimately, the schools will face sharp enrollment declines that mirror the current surge, Hill and Holditch warned. That’s what happened to many petroleum engineering programs during the bust of the late 1980s.

“We are sort of trying to ring the alarm bells, saying `let’s not do this again,’" Holditch told me.

A&M and some other universities, such as the University of Texas, already manage their enrollment, but Hill and Holditch want more colleges to follow suit.

Some schools “are just growing without any limit on their number of students,” Holditch said. “If they keep that up, it could be another bummer here in a few years for those who are graduating.”

High oil prices historically have encouraged the development of new oil and gas reserves, and the shale boom is just the latest example. But the increased production levels from those developments tend to drive prices down, as happened recently with natural gas. Currently, crude oil in the global market is trading well above the average price from the 1940s to now, which has been about $30 a barrel in 2010 dollars.

Of course, as long as prices hold, the increase in fracking is going to require more people. While a traditional reservoir may take hundreds of wells to fully develop, fracking requires tens of thousands of wells, Hill and Holditch note. “That means we need more rigs, logging trucks, fracturing spreads, and yes, more engineers and geoscientists,” they wrote.

Plus, that bust in the late 1980s created an employment gap in the industry. As many older engineers retire, companies are looking to hire more to replace them.

But the shale boom has its limits. Even if the technology can be exported to develop more reserves globally, it’s not clear international shale plays will create more jobs for U.S. graduates. Many foreign countries require foreign oil companies to hire local graduates.

As a result, Hill and Holditch hope the companies and academia can work together to manage enrollment for the benefit of the students, the companies and the universities.

“We’re imploring the other universities to think about having an enrollment management plan, and we’re imploring the oil companies not to abandon us like they did in the 90s,” he said. That's when companies cut engineering programs amid slumping oil prices, a decision that has left many scrambling now as they face a double whammy from retirements and the latest boom.